The U.S. Securities and Exchange Commission (SEC) chairman, Gary Gensler, revealed his worries over the proposed crypto regulations. According to the SEC chairman, the proposed bill can undermine consumer protection in the traditional financial sector.
In a chat with the Wall Street Journal CFO Network Summit on Tuesday, June 14, Gensler bared his mind on the proposed regulatory framework.
The SEC chairman noted the crypto bill would impact investors’ protection in a $100 trillion industry.
The capital market is a large financial landscape, far more than the digital asset industry. And Gensler revealed he is worried about the impact of a regulation spilling into the capital market.
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Lummis-Gillibrand Proposed Crypto Bill
The sponsors of the new crypto guidelines are Cynthia Lummis and Kirsten Gillibrand. The bi-partisan lawmakers developed the “Responsible Financial Innovation Act* to address any aspects of cryptocurrency regulations.
However, the one aspect of the new bill that has generated debates is the “clear authority” given to the Commodities Futures Trading Commission (CFTC) over digital assets. This goes contrary to Gensler’s classification of cryptocurrencies as Securities subject to SEC’s directives.
Moreover, both senators, in part, agreed with Gensler’s position by stating that some digital assets could be considered Securities in the new guidelines. Meanwhile, the two largest tokens, Bitcoin and Ethereum, are considered commodities under the new regulations.
Commenting on the ongoing row, Gensler added that the SEC is not about to expand its jurisdiction. He added that before the proposed regulatory framework, some digital assets were under the agency’s supervision as they are Securities.
Gensler reiterated that the agency is after the protection of consumers since the tokens are offered to the public. The public, in turn, invests in them, hoping for a bright future to enjoy their investments.
CFTC Commissioner Welcomed New Regulations
Christy Goldsmith Romero, the CFTC commissioner, noted that she has yet to look at the Lummis-Gillibrand bill. She, however, welcomed the regulatory move by the U.S. Congress, calling it the right approach.
As a former SEC official, Romero was asked if the CFTC was more liberal than the SEC. She responded that they are somewhat similar in operation. According to her, the CFTC has been driving numerous enforcement in the crypto industry. In addition, both agencies have their area of specialization in the crypto space.
Commenting on the differences between the SEC and CFTC, Romero noted that CFTc gives room for multiple cryptos to trade on regulated exchanges.
Romero shed more light on the permission granted some tokens to trade on the regulated exchanges:
“the CFTC is pretty much experienced in crypto regulation and trading. This is what it needs to move forward in overseeing players’ activities in the digital asset space”.
However, the CFTC still cooperates with the SEC to navigate its way through some complex issues like securities and compliance.
The SEC chairman hopes to see where the new crypto bill would place consumer protection and how it will address it.